The Amazon era is making Vancouver the world’s hottest industrial real estate market

Forget that multi-million-dollar condo on Vancouver’s waterfront. Invest in a warehouse instead.

The Canadian city is the world’s hottest industrial real estate market with lease rates up 29 per cent in the first quarter year-on-year versus a global average of 3 per cent. IKEA and BMW AG are among companies that have snapped up the biggest industrial and logistics spaces, according to data provided by CBRE Group Inc.

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“Industrial previously was almost like a forgotten asset class,” Jason Kiselbach, vice president and sales manager at CBRE Vancouver, said by phone. “But we haven’t even scratched the surface of the demand that’s going to continue to grow and put more pressure on the industrial market.”

E-commerce giants like Amazon.com Inc. are driving the need for more logistics and storage space in urban centres. Consumers demanding quick online deliveries are forcing companies to carry more inventory in the city where the last-mile deliveries take place. Those dynamics are playing out across Canada and the U.S.